Question

City Productions performs London shows. The average show sells 900 tickets at $85 per ticket. There are 145 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $330 per show. The cast is paid after each show. The other variable cost is a program-printing cost of 59 per guest. Annual fixed costs total $580,500 Read the requirements Requirement 1. Compute revenue and variable costs for each show Select the formula and enter the amounts to compute sales revenue for each show. - Sales revenue per show Select the formula and enter the amounts to compute variable costs for each show. Compute the variable costs per show for each cost separately, and then compute the total variable costs per show. - Variable costs per show Cost of programs Cost of performers Total variable costs Requirement 2. Use the equation approach to compute the number of shows City Productions must perform each year to break even First, select the formula to compute the required sales in units to break even. - Target profit Rearrange the formula you determined above and compute the required number of shows to break even. The number of shows needed annually to break even Requirement 3. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $4,128,000. Is this profit goal realistic? Give your reasoning Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn a profit of $4,128,000. (Round the required sales in dollars to the nearest whole dollar. Round amounts in the formula to two decimal places, XX.xx. Abbreviation used: CMcontribution margin.) - Required sales in dollars Now use the information given and the required sales in dollars computed in the previous step to determine the required number of shows needed each year to earn a profit of 54,128,000. (Round your answer up to the nearest whole number.) The number of shows needed annually to earn a profit of $4,128,000 is Is this profit goal realistic? Give your reasoning The profit goal of $4,128,000 is Requirement 4. Prepare City Productions's contribution margin income statement for 145 shows performed in 2018. Report only two categories of costs: variable and fixed since City Productions currently performs 145 shows a year. City Productions Contribution Margin Income Statement Year Ended December 31, 2018 1. 2. Compute revenue and variable costs for each show. Use the equation approach to compute the number of shows City Productions must each year to break even, 3. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $4,128,000. Is this profit goal realistic? Give your reasoning 4. Prepare City Productions's contribution margin income statement for 145 Operating Income (Loss) shows performed in 2018. Report ony two categories of costs: variable and fixed. Print Done Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

Answer:-

				No. of Tickets	Per ticket	Revenue Per show	Annual revenue
1	a	Sales Revenue		900	65	58500	10237500	as per 175 show per year
				No. of Cast	Earning of cast per show	Total Cast cost per show	Annual Cast cost
	b	Variable cost	Cast -A	55	330	18150	3176250	as per 175 show per year
				No. of guests	Each guest cost	Total cost per show	Annual cost
			Programme printing- B	900	9	8100	1417500	as per 175 show per year
		Total Variable cost =A+B				26250	4593750
2	Number of shows Queen productions must perform to breakeven will be as follows
		Contribution per show		=	Sales Per show in 1-a)-Variable cost per show in 1-b) above
				=	32250
			Total fixed cost     =		580500
			No. of shows to breakeven =			Total fixed cost/Contribution per show
						18
3	To earn a profit of 4128000, No. of shows required per years are as follows
		Contribution		=	Fixed cost+profit
				=	580500+4128000
					4708500
		Contribution per show		=	32250
		No. of shows required		=	Contribution/Contribution per show
					146
		Yes, this profit goal is already getting achieved, since there are 175 per shows are held every year
4	Contribution Margin Income statement
		Sales				10237500
		Less;
			Variable Cost			4593750
		Contribution				5643750
			Fixed Cost			580500
		Profit or Net Operating Income				5063250

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